Ben Bradshaw: The hon. Gentleman should be aware that the shadow spokesman on health supports the freedom of hospitals in England to levy acceptable charges to help cover the cost of hospitals; if they did not levy those amounts, they would have to take them away from patient care. I often get questions on the subject from hon. Members such as "What about Scotland?" or "What about Wales?" In Scotland and Wales, people wait much, much longer for their operation. If the hon. Gentleman has a particular problem with his local hospital's policy, he should take that up with the local hospital, which is supposed to offer concessions to people who need to visit regularly. If he is suggesting that everyone at his local hospital should be able to park freely, regardless of what they are doing there, that is a very foolish approach and it would take money away from essential medical need.

Anne Milton: The figures for the north-west are, like those for the rest of the country, truly shocking with one in 10 five to 16-year-olds having a clinically significant mental health problem, including anorexia, anxiety and depression—one in 10: the numbers are huge. Furthermore the use of anti-depressants on children has increased 38 per cent. over the past 10 years. These shocking figures clearly demonstrate the failure of our child and adolescent mental health services. Although I welcome the Government's attempts to do something about it, the Minister should, to be fair, admit that children and adolescents have been failed over the past 11 years and that we are now seeing the results in the increase in the mental health problems of young adults.

Alan Johnson: It is not right to say that nothing happened after the Royal College of Nursing conference. In fact, the week after that conference I wrote to every strategic health authority and made it clear that by the time the RCN next meets I want to see progress in this area. It is true that the operating framework that we planned to get out in July did not, in the end, go out until December, and our announcement about what we would do was made on the back of the operating framework.
	This issue is too important for party-political point scoring, because the care and respect agenda is crucial to Members on both sides of the House. All I would say is that the plans that the hon. Member for South Cambridgeshire (Mr. Lansley) has put forward for an increase in single rooms are hopelessly under-costed. He says that they would cost £1 billion, but they would actually cost about £9.5 billion, and he will not be able to afford it.

Employment Opportunities

William Cash: Will my hon. Friend take into account the fact that our presence here today to discuss the money resolution must be in accordance with the rules laid down in "Erskine May" and in Standing Orders? We are discussing a proposal for new or increased expenditure, which is not already covered by legislative authorisation. We are therefore in a de novo situation. My right hon. Friend the Member for Wokingham (Mr. Redwood), and my hon. Friends the Members for Aldridge-Brownhills (Mr. Shepherd), for Braintree (Mr. Newmark), and for Gosport (Sir Peter Viggers) have already shown that there is deep concern about the fact that the amount is new and increased, and, as my right hon. Friend the Member for Wokingham said, its implications are stupendous.

Madam Deputy Speaker: With this it will be convenient to take the Government amendment in lieu of Lords amendment 83.
	Lords amendments 75 to 82.

Ian Pearson: Before addressing the amendments made in the other place in detail and the amendment the Government are now proposing, it might help if I were to summarise the purpose and history of clauses 228 and 229 in the latest print of the Bill. Their purpose is to put the use of public money in the proposed bank resolution arrangements, or in the provision of financial assistance to banks and their customers more generally, on to a proper statutory footing. Clause 228 does that by providing the statutory cover for expenditure in Supply estimates. That is required under a long-established convention, commonly called the PAC concordat of 1932, that there should always be specific enabling legislation to enable the finance for a new service to be provided from public funds. We amended the clause in Committee in this House to give statutory cover for financial assistance where the institution concerned was not a UK deposit taker or a financial institution that was not a deposit taker—for example, a bank holding company—but further issues came to light that had to be dealt with by Government amendments in the other place. I briefly commented on them in the money resolution debate, and I shall turn to them shortly.
	Clause 229 provides statutory cover for drawing money from the national loans fund to make loans urgently where that is necessary to protect financial stability. We also amended the clause in Committee to extend the types of person to whom loans could be given to cover financial institutions other than UK deposit takers. I shall also talk about the Government amendments made in the other place after discussing clause 230. This clause, the result of the passing of amendment 83 in the other place, provides for more rapid detailed reporting of financial assistance given to banks, financial institutions and their customers. It provides for quarterly reporting of expenditure, and of guarantees and similar commitments that might result in expenditure, met with money voted by Parliament under the authority of clause 228(1). Clause 230 also provides for the same reporting arrangements for loans made under clause 229. It requires the Treasury to lay sufficiently detailed reports before both Houses of Parliament, but allows for the disclosure of the information to be delayed as long as there is a public interest in not disclosing it.
	The Government have always appreciated the concerns that many people have about transparency and reporting. Those are important issues for the whole Bill, and not just in relation to public expenditure, and we discussed them at great length in Committee and they were discussed at great length in the other place. The Government's view is that it is necessary to balance the desirable objective of transparency against the need for confidentiality in a number of contexts. There will be cases where action to tackle financial crisis, taken under the Bill or otherwise, can be effective only if it can be kept confidential.

William Cash: Does the Minister accept that normally the money resolution authorises, in general terms, the expenditure to be authorised and subsequently, as he said, there is an estimate, but that that is not, in itself, a reason for accepting the money resolution? Does he also understand that much of the reason for the Bill's being discussed and voted upon by an unelected Chamber—the other place—is because the Government imposed restrictions on the amount of debate to take place in this House and abrogated to the upper House matters that should properly be dealt with only in this House, because we are elected on behalf of the people?

Ian Pearson: As a Government, we always want to be open and transparent. As an experienced Member of this House, my hon. Friend will know that when we make major decisions as a Government it is normal practice that we report them to Parliament either through an oral statement or a written ministerial statement. The normal financial accountability mechanisms will be considered and will be debated in due course. I assure him that the Government want to be absolutely clear about what we are doing and to explain why we are taking action. We think that it is vital that we should continue to do all we can to ensure the stability of the financial system in the UK. That is why the announcements that the Chancellor made in an oral statement to the House a few Mondays ago showed the normal practice that we would follow. That does not negate the need for other reporting mechanisms to be put in place. As I outlined earlier, the estimates and votes process is long established in this House and provides a means of financial accountability.
	Let me turn to Lords amendments 75 to 80, which provide statutory cover for expenditure incurred in connection with schemes run by Government Departments other than the Treasury. They do that by providing statutory cover for schemes where the financial assistance being provided will both facilitate the activities of the bank or financial institution and provide a benefit to a third party, such as customers of banks or other financial institutions, or to the wider economy. Expenditure incurred in connection with schemes such as the home owners mortgage support scheme announced by the Prime Minister on 3 December and the working capital scheme that I announced to the House on 14 January in my capacity as Under-Secretary of State for Business, Enterprise and Regulatory Reform are covered by the provisions.
	Lords amendment 81 addresses a different issue regarding the provision of financial assistance. As the House will know, the Treasury has made a number of arrangements to support the UK banking sector. They include the credit guarantee scheme for new inter-bank lending introduced in October 2008, as well as the asset protection scheme and guarantee scheme for asset-backed security that were announced on Monday 19 January. Those schemes involve the provision of guarantees or similar financial commitments by the Treasury. Although we hope that there will be no need to make any payments, the Treasury must be in a position to settle promptly any liabilities that arise. Normally, that would be effected by securing parliamentary approval for an estimate, but clearly a need for expenditure might arise at any time, including during a recess when estimates could not be obtained. The amendment addresses that by providing for direct access to the consolidated fund without an estimate in cases where the funds are required urgently. It also provides for parliamentary reporting with suitable safeguards in respect of commercial confidentiality and the maintenance of market confidence.

Mark Hoban: My right hon. Friend makes an important point. My interpretation is that although at the time the Government might decide for reasons of confidentiality not to lay a report before Parliament, that would be swept up in what was Lords amendment 83, which we pressed in the Lords. I hope that would be covered in the new amendment tabled by the Government in lieu, so there would be a report. It may not be as timely as we would like, but there would be reporting at six-monthly intervals.
	The Minister made an important point about the balance to be struck between confidentiality and public scrutiny. Clearly, one of the issues in relation to Northern Rock was that the transparency of information provided was a barrier to giving covert assistance to Northern Rock. We need to have that debate in mind, but I hope that the six-monthly reporting will act as a sweeper, so to speak, to pick up all those instances where financial assistance has been given but no report has been laid before Parliament.
	When the Government decided, in the first phase of the bank bail-out, to take stakes in RBS, what was then Lloyds TSB and HBOS, we had a debate on the Floor of the House in which the Financial Secretary to the Treasury and my hon. Friends the Members for South-West Hertfordshire (Mr. Gauke) and for Wellingborough participated. Specific approval was given for an estimate to pay for that investment. Will we have the same opportunity to vote on the elements set out in the second bail-out package? It was not clear from the Minister's remarks whether we would have a specific vote on those elements, or whether they would go through the normal estimates procedure, where individual items are not voted on.
	Not only have we seen the second phase of the bank bail-out, but money has been lent to the financial services compensation scheme in respect of the rescue of the Icelandic banks in the UK, and we should ensure that there is proper scrutiny in the House of that. I would welcome greater clarity from this Minister as to how items would be voted on and whether there would be stand-alone debates on the various aspects of financial assistance envisaged in Lords amendment 79.
	The Minister also drew the House's attention to the words "too urgent" in Lords amendment 81, for when there was a pressing need to provide money from the Consolidated Fund, the issue being whether money could be granted before there was a vote on it. He gave the specific example of there being a crisis during a recess and Ministers having to act urgently without the approval of the House. Will he confirm that when the House is sitting, the Government's first preference will be to go through the estimates procedure, rather than to rely on the powers set out in Lords amendment 81?
	Lords amendment 83 was tabled by my noble Friend Baroness Noakes and Lord Turnbull in the other place. One of the important themes in the debate is transparency and understanding the scale of the taxpayers' liability. We touched on that in different contexts during our debates on the Bill in this place. I felt at times that there was a bias towards secrecy as a way of enhancing financial stability, so I welcome the increased level of scrutiny that comes from the amendments made in the other place. It is important that the tripartite authorities are accountable to Parliament and others for the use of their powers under the Bill. The report envisaged in Lords amendment 83 went a long way towards increasing that transparency. It set out the requirement for a quarterly report to be made to Parliament on sums actually and potentially committed under the financial assistance powers in clauses 228 and 229.
	During our earlier debate on the money resolution, I set out a number of the schemes that the Government have announced in the past three or four months, and I have no intention of repeating them. Clearly, however, there is a range of schemes that involve significant financial commitments. I have talked about the asset protection scheme; one estimate this weekend suggested an amount of up to £400 billion. The Minister referred to the working capital scheme, and there is the scheme proposed by Sir James Crosby in relation to asset-backed securities. There is also the asset purchase facility, under which the Bank of England has been authorised to acquire commercial paper. So there is a range of schemes with significant price tags. It is important that taxpayers should understand the extent to which they are exposed to the financial assistance given under the schemes, and that Parliament and the taxpayer should hold the Government to account for the money involved in them.
	One of the points made in the other place was that the schemes are put forward by a range of Departments: the Treasury is responsible for some, the Department for Business, Enterprise and Regulatory Reform for others and the Department for Communities and Local Government for the homeowners' scheme. It is important that the Treasury acts as the focal point for drawing the schemes together and ensuring that a proper report is made to Parliament.
	When Lords amendment 83 was debated in the Lords, there was significant support from the Liberal Democrats, the Conservatives and a number of Cross Benchers. The majority of 35 in the vote on it demonstrated the strength of feeling about the welcome move to increase transparency. During the debate, Lord Davies of Oldham, speaking for the Government, opposed the amendment as he felt that it was unnecessary and that there were sufficient existing powers within the legislative programme to ensure that there was proper scrutiny. He prayed in aid the Exchequer and Audit Departments Act 1866 and the various Consolidation Acts and Appropriation Acts. Frankly, his arguments did not wash with the House of Lords; it did not feel that they would ensure sufficient transparency. Lords amendment 83 was backed so that there could be proper reporting of the amounts involved.
	In their amendment, my noble Friend Baroness Noakes and Lord Turnbull reflected some of the concerns that the Minister mentioned. They referred to summarising data so that individual obligations were not necessarily seen and pointed out that there may be situations where information could be withheld as a matter of public interest.
	What I take from the Minister's remarks is that the Government have listened to the well-argued points that were made in the other place. Lord Davies said that the current mechanisms of accountability are sufficient. Conservative Members would like the Government's conversion to the recognition that given the sums involved there must be greater transparency and accountability in the financial assistance that is given. We welcome the Treasury's willingness to be as open as possible in disclosing information on exposure, subject to the caveat in new subsection (4) in the Government's amendment. That represents a significant move by the Treasury and a recognition of the strength of the arguments made in the other place, and it is an important advance for transparency in how these matters are dealt with. Taxpayers have a right to know how much a bank bail-out is costing them. We therefore welcome the fact that the Government have tabled their amendment in lieu and we will not divide the House on it.

Jim Cousins: I had not intended to speak in this debate, but the correct description by the right hon. Member for Wokingham (Mr. Redwood) of the United Kingdom as a large pool of bank debt loosely tied to a medium-sized country was a telling one. He went on to refer to the possibility that our Government, and others in the western world, might be testing to the limit the ability of Governments to raise their own debt. That was also a fair point, which we need to address when we consider these issues.
	The other place has done us a service in providing us with these amendments. I understand the Government's difficulty in working out how to report to Parliament on an ever-changing and fast-moving situation. Their efforts to do so are set out in their alternative to Lords amendment 83, and I have no quarrel with them, but they must accept that the House cannot wait until the end of the first six-month period set out in their amendment for a comprehensive report on where we have got to. That point was fairly made by the hon. Member for Dundee, East (Stewart Hosie).
	We should not have to wait until October to discover where the state aid reference to Northern Rock—which has paralysed Northern Rock's ability to serve the Government's purpose of opening up new lending—has got to. We should not have to wait until October to work out the extraordinary situation that is now developing with the remnant of Bradford & Bingley—which is still in state ownership—in which the Government will find themselves owning a significant proportion of the outstanding buy-to-let mortgages in this country. That proportion could be in the order of 20 per cent.
	Through their ownership of Bradford & Bingley, the Government are still observing the terms of the deal that Bradford & Bingley made with GMAC, the American General Motors company that branched out into finance. Many of us have had to deal at constituency level with GMAC-provided mortgages, which are in a sorry state. Bradford & Bingley did a deal in which it undertook to acquire billions of pounds worth of those mortgages on a quarterly basis. The last quarter in which those mortgages will be acquired ends on 31 March 2009, by which time 20 to 25 per cent. of the stock of self-certified mortgages for the self-employed will, through the GMAC acquisition, be in state ownership. The House needs to know where we have got to with all this. We need to know what the immense policy consequences of those deals will be, and what they will mean for public expenditure.
	In this debate, we have clarified that the Government intend to support UK banks and not other banks. I think that we have also established that the support that the taxpayer is making possible through the working capital fund will go only to UK companies. However, through the guarantee of assets—part of which has already been undertaken, and more of which will be decided at the end of this month with Lloyds and RBS—it is clear that the British taxpayer will be supporting loan books that are not UK-located.

Ian Pearson: I shall focus on three main areas in response to hon. Members' comments on the Lords amendments. The first is the widening of the extension of statutory cover for expenditure incurred by the Treasury or other Government Departments; the second is the parliamentary accountability mechanisms ordinarily in place; and the third is the Government motion to disagree with Lords amendment 83, which has been much debated.
	In passing, however, I would first like to deal with the accusation that the Government delayed taking action to support Northern Rock. I completely refute that: the Government took timely action— [Interruption.]—and let me point out that the official Opposition would have let Northern Rock fail, which would have created a crisis for savers in this country. We were entirely right in what we did.
	The role of the media, which the right hon. Member for Wokingham (Mr. Redwood) and the hon. Member for South-East Cornwall (Mr. Breed) mentioned, is another important issue to deal with in passing. It is true to say that we live in a 24-hour news culture in the UK. In that environment, it is not possible to have the sort of cosy relationship that might have existed in the past between the Bank of England and other banks or to justify the expectation that cosy deals can be done and kept secret. Extensive scrutiny takes place through the media. On the whole it is helpful, but the right hon. Member for Wokingham was right to point out that, on some occasions, media speculation has resulted in damaging activity—damaging to markets and damaging to companies' reputations.

Ian Pearson: The amendments deal with some of the introductory clauses in the Bill on special resolution regime objectives, the content of the code of practice and the banking liaison panel. I believe that they reflect the Government's constructive response to concerns expressed in all parts of both Houses on elements of the SRR framework.
	Lords amendment 1 deals explicitly with the concept of continuity of banking services within the SSR objectives as set out in clause 4. The Bill already includes, at its heart, provisions that are aimed at ensuring continuity of services. The very purpose of the stabilisation tools of the special resolution regime is to ensure that banks do not fail completely, thereby maintaining full continuity of banking services. This is already reflected in both the objectives set out in clause 4 and the draft code of practice under clause 5 that explains them. However, for the avoidance of doubt, this amendment seeks to make it clear that the SRR objectives include the concept of continuity of banking services. Hon. Members will note that this is included as part of objective 1, to protect and enhance the stability of the financial systems in the UK. To be absolutely clear, this drafting is entirely consistent with the fact that this concept also relates to the objectives to protect and enhance confidence in the banking systems and to protect depositors. I would also like to make it clear that continuity of banking services is not the only element to be considered under objective 1. The amendment therefore does not limit the scope of that objective in any way, but it now makes it explicit in the Bill that this concept is at least one of the elements that must be considered.
	Government amendments 2, 3 and 4, which were brought forward from another place, add to the list of matters that the code of practice may address and the concessions that were agreed in the other place. Members in another place requested further clarification on a number of matters or expressed a desire that the code of practice should include further information, and I recall that similar expressions of interest and concern were also made in Committee in this House.
	Clause 5, and in particular subsection (1), sets a broad remit for the code of practice. In response to points made in debates here and in another place, the Government have agreed that further information should be added to the code and that it is appropriate to signal that in clause 5. These amendments therefore achieve the following. First, they signal that the code can provide information about how the SRR objectives are to be understood. That follows on from an Opposition amendment in another place, but the Government's amendment goes further by explicitly signalling in the Bill that the code can include information on how the terms within all the SRR objectives are to be understood. Secondly, the amendments expressly state that the code can provide further guidance on the choice between the stabilisation options. Questions were raised in both Houses about the factors that will determine the choice of one tool over another, and the truth is that these decisions will be made on a case-by-case basis. Consequently, the code is the right place to provide significant additional information on this matter. The draft code already lists factors to be taken into account when deciding between different options and the Government believe it could include more information on that point.
	The final two Government amendments in the group add further to the list of areas about which the code can give guidance: continuity obligations and compensation arrangements. Those additions were a response to two parts of the debate in Committee in another place. As I have stated during other stages of the Bill's passage, I believe that the code provides a useful addition to the architecture of the new special resolution regime. The Government have listened carefully to the points made in debates and the representations we have received, and we believe that these amendments will help provide reassurances that further information can, and should, be provided on a number of important elements of the SRR. These amendments were welcomed in the other place, and I commend them to the House.
	In Committee in the House of Lords, Lady Noakes proposed an amendment to widen the remit of the banking liaison panel. As Members will know, I was keen that we set up an expert liaison panel to provide advice and assistance and to help us co-produce some of the secondary legislation. The Government agreed with the main thrust of Lady Noakes's proposal. The Government's position, which has not so far been controversial, is that it would not be appropriate for the banking liaison panel to provide advice to the Treasury on the operation of the SRR powers. For example, it would not be appropriate for the panel to advise on the drafting and placing of a transfer or associated instrument. However, I believe that we have come to a consensus that the panel's remit should include the effectiveness of the policy and the powers in general of the SRR. One concern raised in another place was to ensure that the panel will have a role in monitoring the market for unintended consequences of those new powers. The Government, therefore, tabled these amendments to meet those concerns.
	Lords amendment 5 provides the panel with a broadly defined purpose to advise the Treasury on the effect of the SRR on both the banks that are potentially subject to it and the wider financial services markets. In addition to this broad purpose, Lords amendment 6 also provides the panel with a statutory remit to advise the Treasury on the code of practice. It also provides that the banking liaison panel should advise the Treasury on the exercise of the power to change law under clause 75—on which we had considerable debate in the Committee stages—with the exception of cases where the exercise is carried out in connection with, or to facilitate, a particular use of a stabilisation power.
	The Government's decision to establish the expert liaison group has been welcomed by interested parties, and the group has already provided invaluable advice. I hope that when it is re-constituted as the banking liaison panel, it will continue with this good work. The Government amendments proposed today will ensure that this work is given a firm and broad statutory basis, and I commend them to the House.

Ian Pearson: It is a hiatus valde defiendus in the learning of the hon. Member for Fareham (Mr. Hoban) that he is not instantly familiar with the word "subserviate". That lacuna in his knowledge has now been addressed, and I hope that the word can be used in future legislation.
	The hon. Gentleman said that we had reached the right point with amendments 17 and 31, so I need not explain them any further. I will just say that we reflected on Baroness Noakes's amendments and that I appreciate the hon. Gentleman's support and his agreement that we have the balance right at the moment.
	The hon. Gentleman did some probing about what we could expect to see in the report introduced by Government amendment 58. We have had numerous debates about what should rightly be in a Bill and what should be done through codes of practice, secondary legislation or the normal course of Government reporting. We do not believe that the Bill should list the specifics of what should be included in every report. The bounds of commercial confidentiality need to be respected; we have to bear it in mind that banks in this situation will still be commercial bodies undertaking commercial transactions, and that there is rightly a duty of commercial confidentiality. However, while respecting that, we should still be as open and transparent as possible in respect of the information that we provide.
	I hear what the hon. Gentleman said about Bradford & Bingley. My understanding is that it will publish a version of the business plan on which it has been working. The hon. Gentleman will be aware of the reporting with regard to Northern Rock. As I outlined earlier, there are other opportunities, in addition to the annual report, for hon. Members to probe Ministers on banks in temporary public ownership.

Ian Pearson: I appreciate the hon. Gentleman's concerns, of which we have been aware. In our consultations about whether it was right to take this power, we talked to a number of institutions and, I hope, allayed their concerns. I do not foresee that companies will want to restructure simply as a result of the power that we are taking in respect of bank holding companies. I therefore believe that his fears are unwarranted, but we will need to ensure that all the provisions that involve complex detail are kept under continual review.
	 Lords amendment 49 agreed to.
	 Lords amendment 50  to 53  agreed to , with Commons privilege waived in respect of Lords amendments 51 to 53  .

Peter Bone: The point I wanted to raise was whether the Government would decide whether it was materially different or whether was for the Chair to decide whether it was in order.

David Gauke: I have a few questions to ask the Minister on this group of Lords amendments. As he has said, Lords amendment 72 provides that the Bank of England must give notice to the Treasury before making a direction and that the Treasury may confer immunity from liability. I would be grateful if he would elaborate on the relationship between the Bank of England and the Treasury in those circumstances. It would appear that the Bank takes the lead and that this is merely a notification requirement. What would happen if the Treasury objected to a course of action taken by the Bank? What would happen if it objected to a direction that the Bank gives under clause 188?
	Lords amendment 72 states that the
	"Treasury may by order confer immunity from liability...in respect of action or inaction in accordance with a direction."
	Clearly, a degree of discretion is involved in the use of the word "may". During the Bill's progress we have had many discussions on using the term "may" as opposed to "shall" or "will". Could the Minister give an indication as to the factors the Treasury would take into account when deciding whether or not to confer immunity from liability in damages?
	Lords amendment 73 relates to the statement of principles to be applied in determining penalties, which, again, is to be sent to the Treasury. Could the Minister elaborate on the relationship between the Treasury and the Bank of England in this context? Will the Treasury have a formal role in giving its views on these principles? Will it be able to recommend or indeed require that the Bank of England changes these principles?
	Lords amendment 74 states that
	"Banknote regulations must establish a method for determining the maximum amount of a penalty."
	I merely note that there seem to be two separate regimes in parts 5 and 6. The one in part 5, which deals with the inter-bank payment systems, provides for a statement of principles with regard to penalties to be produced by the Bank of England, whereas the one in part 6 provides for banknote regulations to specify the maximum penalty. Will the Minister explain why it is appropriate to have two separate regimes, given that we are addressing both those issues in the same Bill, at the same time and in the same group of amendments? There may be good reasons for the slightly different approach being taken, but it might be helpful for the House to hear them. These Lords amendments attempt to address some of the concerns that we raised in Committee, and that is welcome. We are grateful to the Government for, again, listening to some of our concerns.

Ian Pearson: I welcome the hon. Gentleman's support for the amendments, which were agreed in the other place. He is right to say that the Government have carefully listened to the concerns that have been raised in a number of places, not least by Members of this House. He asks a number of detailed questions and rather than respond to each of them individually now—I am not sure that I would be able to do so—it is probably best if I write to him and place a copy of my reply in the Library of the House.
	 Lords amendment 72 agreed to.
	 Lords amendments 73 to 82 agreed to , Commons privilege waived in respect of Lords amendment 75.
	After Clause 227

Ian Pearson: Lords amendments 84 to 88 provide the Treasury with powers to make regulations with regard to investment bank insolvency. They were inserted into the Bill after consideration in the Lords Committee, after I had signalled the Government's intention to do so in this House.
	The powers that the Government are taking with regard to investment bank insolvency are of critical importance. They have been brought forward to enable the Government to address the concerns about the recovery of client assets that have followed from the collapse of Lehman Brothers. I shall take this opportunity to explain how we are proceeding because it has not previously been discussed in this House.
	Hon. Members will be aware that when Lehman Brothers failed, its UK arm also collapsed. This subsidiary held a very large quantity of client assets. The exact sum is unknown, but is likely to have run to many billions of pounds. Much of this money may have been simply passing through Lehman's broker-dealer business at the point of default.
	At present, those clients to whom those assets belonged have no way of recovering them outside of the normal insolvency arrangements. Those procedures could last for a substantial period of time as Lehman Brothers is one of, if not the most, complex insolvency ever to occur. This is no small matter. If clients are unable to access assets that they believe they rightfully own, it of course has implications for market confidence in, and the effectiveness of, the legal arrangements—including those relating to insolvency—that support the UK financial system.
	Hon. Members will be aware, I am sure, that a major source of the UK's competitive advantage in financial services is the certainty provided by the relevant legal regimes in the UK. If those were seen to be insufficient, there would be implications for the future of the City of London as a financial services centre. Ineffective operation of insolvency arrangements in relation to investment banks and client assets could also have financial stability implications, if it impacted on the ability of clients to meet their own obligations to third parties. That may have particular relevance in the case of rehypothecated assets where recovery may be especially challenging.
	The Government therefore clearly need to act, both to ensure that clients have the ability to recover their assets more easily in any future investment bank insolvency, and in order to maintain confidence in the financial systems of the UK. It is unfortunate however that the sheer complexity of the challenges that have emerged since the failure of Lehman Brothers and its UK subsidiary defy simple solutions. The House will understand that the application of insolvency procedures to an investment bank, or any other large, complex financial institution, is complicated and challenging. To consider ways of revising such procedures is equally complex.
	For this reason, the Government have sought the advice of an expert panel with regard to the concrete steps that need to be taken in order to address those challenges. This panel, the establishment of which was announced in the pre-Budget report, is to consider how regulations may best be made that enable the unencumbered return of client assets without creating substantial externalities or negative consequences. The review will examine whether the statutory purpose of administration as provided for in the Insolvency Act 1986, presents problems in the case of institutions that hold client assets; the procedures for administration of a complex investment bank; and arrangements for the continuity of brokerage accounts.
	The provisions of these new clauses provide the Treasury with the powers necessary to make any changes that may be required as a result of this review. They are necessarily broad, for the simple reason that it is impossible for the Government to prejudge the conclusions of the expert panel, particularly in such a complex case. Let me reassure the House that the powers that these clauses confer would be exercised only if such changes were deemed necessary. The review may, of course, find that no changes are necessary. The powers are therefore precautionary, insofar as they will not be used without a clearly identified need to do so, and they will be closely targeted if deployed.
	Let me briefly describe the provisions of each of the clauses that lay out the powers. The new clause inserted by Lords amendment 84 is the first in the group and sets out the scope of the enabling power. The power will permit the Government to make regulations to change the insolvency regime for investment banks. Investment banks are defined as institutions, incorporated or formed under UK law, that have permissions under part IV of the Financial Services and Markets Act 2000 to carry on the regulated activities of safeguarding and administering investments, dealing in investments as principal or dealing in investments as agent. The clause also defines client assets as they are to be considered within the meaning of those powers and provides the Treasury with an order-making power to alter those scope definitions as necessary and appropriate.
	The next new clause provides that the Government may lay regulations to modify existing insolvency law in its application to investment banks or to establish a new procedure for insolvent investment banks. In line with existing insolvency law, the new regime would apply when an investment bank was either unable or likely to be unable to pay its debts or when its winding up would be fair.
	The following new clause provides the detail of what the regulations may provide for and how they would work. It includes provision for the regulations to set out those persons who can initiate the special procedure or who can make an application to a court for the procedure to be initiated by court order.
	The new clause inserted by Lords amendment 87 sets out the detail by which any regulations may be made. The clause will provide that the regulations should be made by statutory instrument and should be subject to the affirmative procedure. The Treasury must consult before making any such regulations.
	Finally, the new clause introduced by Lords amendment 88 provides for a review of insolvency regulations. As a consequence of the clause, the Government must establish an independent review of any regulations that have been made within two years of their coming into force. That review will be independent, expert, and impartial. It will consider whether the regulations have been effective in identifying, protecting and facilitating the return of client assets. It will consider whether, in drafting the regulations, the Treasury has paid due attention to protecting creditors' rights and ensuring legal certainty for all relevant stakeholders—creditors, clients, administrators and the investment banks. That is critical and will ensure that the impacts on those firms and persons who may be affected by the regulations are subject to full consideration.
	As I have said, the Government believe that the proposals are essential for supporting continuing market confidence in the UK as a major financial services centre. They were debated at great length in the other place, and rightly so. I believe that the provisions are necessary.

Mark Hoban: I think that my hon. Friends would be reluctant for me to do that, since I could speak for another 32 minutes on this group of amendments.  [ Interruption. ] I might be tempted to do so, but not on this occasion, to my colleagues' relief as much as mine, I suspect.
	The Minister said that the purpose of amendment 89 is to assist the valuer of Northern Rock in completing his work, and that it amends the Banking (Special Provisions) Act 2008. Can he confirm that there are adequate powers in the Bill to assist valuers when a company has been taken into temporary public ownership so that we do not have to return to this at a later stage?
	On amendment 90, we discussed in Committee the fact that it seemed rather odd for the Bank of England to be the only body that had statutory responsibility for financial stability. It is not a statutory responsibility of the Treasury or of the FSA, so this is a welcome move forward as it ensures that the Bank and the Treasury recognise their roles. We had tabled an amendment along similar lines in the House of Lords, but apparently the Government did not like our use of the phrase, "in co-operation with" and preferred the much more dynamic, "working with". I am not sure that I can see much difference, but the Government have their own view of what is and is not appropriate language to include in the Bill. I am rather grateful that they did not try to use the word subserviate in the amendment.
	On amendments 91 to 93, I echo the comments that the Economic Secretary made about my noble friend Baroness Noakes, who has made a significant contribution to improving the Bill during the deliberations in the Lords. It is right to ensure that there is broader disclosure of any conflicts of interest of members of the financial stability committee, some of whom are non-executive directors who hopefully will have relevant experience from their business lives to contribute to the committee. I welcome all of the amendments.

National Parks (New Forest)

Kevan Jones: I congratulate my hon. Friend the Member for Bradford, West (Mr. Singh) on securing this debate. I am grateful for the opportunity that it affords me to update the House on Mr. Stuart's case, which is some 18 years old and has, over that time, been the subject of extensive correspondence between my ministerial predecessors, and my hon. Friend and his predecessors, as Mr. Stuart's constituency MP. Owing to the passage of time, much of the paperwork is longer retained, but I would like to reassure my hon. Friend that the limited information available shows evidence of a detailed investigation undertaken by my predecessors into all aspects of the case.
	It might be helpful to recap the Ministry of Defence's understanding of Mr. Stuart's complaint. As my hon. Friend mentioned, Mr. Stuart sustained an injury to his neck and shoulder while serving at RAF Belize in November 1991. He subsequently reported sick in January 1992, upon which a full investigation was undertaken by the medical authorities and Mr. Stuart was put on what are referred to as "light duties". As my hon. Friend mentioned, he then took legal action against the Department concerning the injury and, after exhaustive investigations, accepted a full and final settlement in 2004.
	However, in addition to his legal claim, Mr. Stuart contacted his then Member of Parliament, the then Member for Workington, now the noble Lord Campbell-Savours, to raise a number of complaints about the treatment that he had received for his injuries while in the RAF and about the decision not to extend his RAF service. Mr. Stuart's concerns about his medical treatment were addressed by the right hon. Viscount Cranborne, then Parliamentary Under-Secretary of State for Defence, in his letters of 28 September 1993 and 21 February 1994 to Lord Campbell-Savours. Viscount Cranborne confirmed that there was no evidence that the medical staff who had been responsible for Mr. Stuart's health had been in any way negligent. On the contrary, it was clear that all the organic causes of his symptoms had been fully investigated.
	It was apparent that Mr. Stuart's complaint had been taken seriously at all times, with every effort being made to assist him. He was treated by a physiotherapist and saw a physician, an orthopaedic specialist and a neurologist at regular intervals. Viscount Cranborne concluded that his complaints had been taken seriously at all times. Mr. Stuart continued to receive medical attention until his discharge on invalidity grounds in July 1995.
	As to Mr. Stuart's specific complaint against his physiotherapist in November 1994, the then Minister for Defence Procurement confirmed that the RAF director general medical services had personally reviewed Mr. Stuart's treatment and confirmed that there was no case to support the accusation of medical negligence against the physiotherapist.
	Mr. Stuart has also raised the issue of the extension of his service. He complained that although an extension of service by three years was offered to him in July 1992, which he accepted, it was subsequently withdrawn when the results of medical tests became available. Viscount Cranborne, in his letter of 28 September 1993, informed Lord Campbell-Savours that individuals can be offered extensions of service subject to continued eligibility and suitability for service. Eligibility and suitability must be confirmed by the individual's superiors and by medical staff before the offer is formally made to the individual. In Mr. Stuart's case, it was known that he was awaiting an appointment with a specialist at the time of the offer. I understand that Mr. Stuart contended that, since he had not at that stage been medically downgraded, the unit medical staff should have approved his extension of service. In fact, given that the unit medical staff were aware that he was awaiting further medical tests, it would have been a breach of regulations for them to have endorsed Mr. Stuart as fit for further service before the outcome of those medical tests. The case was therefore returned to the RAF personnel manning authority to await the outcome of those medical tests.
	The RAF authorities considered Mr. Stuart's request to be allowed to extend his service very carefully. Occasionally, personnel are granted a short period of extra service to enable them to regain an acceptable level of medical fitness to re-engage. However, following his medical tests, the medical staff advised that is was very unlikely that Mr. Stuart would regain the necessary level of medical fitness to enable him to be re-engaged in the RAF.
	On the issue of medical negligence, to which my hon. Friend has referred, Mr. Stuart initiated a claim against the Ministry of Defence in May 1993 in respect of the personal injuries he had sustained in Belize. That action took quite a long time to reach its conclusion, but it was settled in August 2004, when Mr. Stuart accepted an offer in full and final settlement of his claim against the Ministry of Defence. The conditions of that settlement precluded him from making any further claims against the Ministry of Defence in relation to the incident, or from pursuing any other course of action to obtain financial compensation. Having reviewed the file, it is clear that he accepted that offer in full and final settlement of any future claims against the Ministry of Defence.
	My hon. Friend has referred to the issue that is perhaps now at the heart of Mr. Stuart's case—namely, the redress of his complaint—and I should like to touch on that now. During the period 1993 to 1997, Mr. Stuart raised three redress of complaints procedures, in accordance with Queen's Regulation 1001. While there is little documentary evidence remaining about the level of investigations that took place, it is evident that a large amount of ministerial time was spent reviewing Mr. Stuart's case with RAF staff to ensure that a full, open and detailed explanation could be given in response to his inquiries. That is supported in the documentation that my predecessors have written in response to the large number of inquiries they received.
	Limited information is available about the investigation carried out in respect of the redress. I can therefore only refer my hon. Friend to the letter of my predecessor of 30 January 2006, which found that Mr. Stuart had been requested to provide further information in support of his redress of complaint to enable the investigation to take place. Unfortunately, despite a number of reminders, Mr. Stuart failed to provide the requested information and a decision was then taken to close the case. While there are no specific guidelines within Queen's Regulation 1001 regarding the closure of a case prior to submission to the Air Force Board, every reasonable course of action should be taken to ensure that all relevant information is available to enable the board to make a judgment on the case. Mr. Stuart had the option to request an extension to the deadline to enable him to provide the relevant information, but there is unfortunately nothing on the record to indicate that that was ever requested or that any further explanation was actually provided.
	In conclusion, it has been nearly 14 years since Mr. Stuart was invalided from the Air Force. I would like to put on record my thanks to him, as to all former servicemen and women, for their service to this country. Limited papers are now available to enable a further investigation to take place. That said, having considered the exchanges of correspondence and the information that has been presented to my predecessors, I am assured that all the complaints have been thoroughly investigated and that Mr. Stuart has been treated fairly within the parameters of the Queen's Regulations. In light of the fact that Mr. Stuart has accepted compensation in a full and final settlement of his injuries, there is no real basis for reopening the case now.
	In those circumstances and in the light of what has been said, and after looking at the case in detail today, I feel that there is really no way forward. I congratulate my hon. Friend again on securing this debate. I hope it is helpful to him if I say that if either he or Mr. Stuart has any further evidence that has not been presented so far, I would be willing to meet to discuss any such points and to see whether anything has been overlooked. I leave that option open to my hon. Friend; if he brings any more evidence forward, I will certainly meet him at his convenience.
	 Question put and agreed to.
	 House adjourned.